What disadvantage? If the company needs to expand its business abroad it can. Nobody is going to tax them. It's only profits that get taxed. Sure, as a result american investors will get less and government will get more. Nothing wrong with that for we need to support our elderly, our army etc.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Tim Cook "Not Religious" About Holding Cash; 66% of Apple's $81B in Cash is Held Overseas
- Thread starter MacRumors
- Start date
- Sort by reaction score
What disadvantage? If the company needs to expand its business abroad it can. Nobody is going to tax them. It's only profits that get taxed. Sure, as a result american investors will get less and government will get more. Nothing wrong with that for we need to support our elderly, our army etc.
Yeah, because all other countries in the world would be in uproar if it wasn't for the American army!
I got a news flash for you, most other countries can run themselves quite fine without the American army. Let's ask Iraq how well that worked out
It's not a double taxation. They do not have to pay full US tax but only the difference between local and US tax. So do all of us U.S. citizens.
Put more money into the hands of the government and not in the hands of the investors, that always yields the best results
I would give them a 100% write off on any money they bring back that they spend on building manufacturing plants in the US and agree to pay living wages to their employees.
Interesting. So if "every company does this" then I guess every business is avoiding paying taxes in every country on earth. In which case the US is in no way unique in getting screwed out of taxes and being forced to make up the shortfall by overtaxing the middle-class. Fascinating.
So you support Massachusetts being able to collect taxes on revenue not directly created in the state?
If intel revenues were $8 billion as a company, but the fab in Mass only contributed $300 million, intel should pay taxes to teethe of Massachusetts based on $8 billion.
Kool aid
Seriously folks, step away from the kool aid. Unless you studied finance, please read up before you post. This situation has nothing to do with double taxation.
The companies are pushing to reprise the 2004 holiday that allowed them to bring home offshore earnings at a low tax rate of 5.25 percent. Under that break, companies repatriated to the U.S. $312 billion, largely for stock repurchases rather than direct hiring or investment, according to a recent paper in the Journal of Finance, the latest in a series of studies that reached similar conclusions.
The proposed holiday would reward the companies that have most aggressively parked profits in tax havens such as Bermuda, the Cayman Islands and Switzerland, said Martin A. Sullivan, a former Treasury Department economist and contributing editor for the non-partisan Tax Notes.
A lot of what companies report as foreign profit is really U.S. profit that should be subject to U.S. tax, Sullivan said. Those earnings didnt get overseas by accident. Many of these companies intentionally put them there to avoid paying U.S. taxes.
Seriously folks, step away from the kool aid. Unless you studied finance, please read up before you post. This situation has nothing to do with double taxation.
The companies are pushing to reprise the 2004 holiday that allowed them to bring home offshore earnings at a low tax rate of 5.25 percent. Under that break, companies repatriated to the U.S. $312 billion, largely for stock repurchases rather than direct hiring or investment, according to a recent paper in the Journal of Finance, the latest in a series of studies that reached similar conclusions.
The proposed holiday would reward the companies that have most aggressively parked profits in tax havens such as Bermuda, the Cayman Islands and Switzerland, said Martin A. Sullivan, a former Treasury Department economist and contributing editor for the non-partisan Tax Notes.
A lot of what companies report as foreign profit is really U.S. profit that should be subject to U.S. tax, Sullivan said. Those earnings didnt get overseas by accident. Many of these companies intentionally put them there to avoid paying U.S. taxes.
You're missing a huge point here. Corporate tax holidays are nothing new. We had one a few years ago, and very little was reinvested. Companies paid dividends, bought back stocks, paid bonuses, etc. It's nice for the shareholders and CEOs. It did very little good for the economy.
You seem to believe that other countries do not tax foreign income. I suggest you do your research rather than remain ignorant here. The whole point of the system is that they aren't taxed on funds that are reinvested internationally. Consider that if they're using these funds for investments, the tax liability may be further deferred.
Why not look up tax laws on international income for England, Japan, etc. first. Tax laws are all over the place, but companies do still pay something on internationally acquired income. Foreign owned companies that pay tax in the US pay something back home as well.
I really, really......REEEAAAALLY wish they'd buy Adobe! I could really go for buying parts of their Creative Suite on the AppStore for $50-$100! I'm sure a cleaner UI a less bugs would go along with that as well
Watch out what you wish for. Look at what they did with Shake. I don't really think professional software is a big focus for Apple anymore. If they were going to do this at the very least i'd want them to be really into it. The Apple and Adobe thing is pretty weird and annoying though.
It's not something that can really go on forever either. Considering the strive for cheaper and cheaper manufacturing, these companies have to move on further as inflation kicks in.
See here you don't like it because it's a big number.
*S
Go look up international tax laws for a few other countries.It is but tax holidays don't automatically translate to job growth or anything positive for the economy. The intention there is only the net income of their overseas efforts is really taxed.
Ok I am posting a "slightly" biased site here as in they clearly have an agenda but I couldn't find a completely neutral one. I read through a few of them trying to find something better. Anyway their quoted figures and references are accurate. The point of this is that such a policy doesn't dictate how these companies may use the money. http://thinkprogress.org/economy/2011/05/14/173951/repatriation-flashback/
Yes, god forbid they pay an American a living wage when they can use quasi slave labor in China. The "environment" you refer to is people wanting to survive. I know people who work for Apple retail in the US who after a year get a 4% raise that still does not give them a livable wage - despite these record profits! Apple can bring some of that money back and pay their employees a decent salary -- which is a tax deduction and thus avoid the tax they are afraid of. The middle class is withering away and most people don't see it and are clueless of the consequences.
troll? does it make it feel good to you to offend other people eh? what can I say, make $400 a month for you is not slavery. Enjoy your iPhone then. You are helping chinese people.
http://www.dailymail.co.uk/news/art...op-workers-toil-34-hour-shifts-make-iPod.html
or maybe you just read the WSJ?
Most of the wealthiest wouldn't be where they are today without the stabalizing force that is the US military. Most notable example today is North and South Korea, but it was the same in East/West Germany. You have to look no further than your own nation. There is a huge benefit to having a Superpower as an ally along your southern border. You only have to spend about 1.5% GDP on defense, the rest you can invest on internal development because someone else is footing the bill.
This is getting to the level of a Gibson-like "megacorporation." So when will Apple start making sovereign territory claims?
Sign me up to live in that territory
You know it would be run better than anything the government is involved in.
You're missing a huge point here. Corporate tax holidays are nothing new. We had one a few years ago, and very little was reinvested. Companies paid dividends, bought back stocks, paid bonuses, etc. It's nice for the shareholders and CEOs. It did very little good for the economy.
You seem to believe that other countries do not tax foreign income. I suggest you do your research rather than remain ignorant here. The whole point of the system is that they aren't taxed on funds that are reinvested internationally. Consider that if they're using these funds for investments, the tax liability may be further deferred.
Why not look up tax laws on international income for England, Japan, etc. first. Tax laws are all over the place, but companies do still pay something on internationally acquired income. Foreign owned companies that pay tax in the US pay something back home as well.
Watch out what you wish for. Look at what they did with Shake. I don't really think professional software is a big focus for Apple anymore. If they were going to do this at the very least i'd want them to be really into it. The Apple and Adobe thing is pretty weird and annoying though.
It's not something that can really go on forever either. Considering the strive for cheaper and cheaper manufacturing, these companies have to move on further as inflation kicks in.
See here you don't like it because it's a big number.
*S
It is but tax holidays don't automatically translate to job growth or anything positive for the economy. The intention there is only the net income of their overseas efforts is really taxed.
http://thinkprogress.org/economy/2011/05/14/173951/repatriation-flashback/
Are you saying companies like intel and apple haven't reinvested back into this country.
Intel has invested over $15 billion in new fabs over the last 8 years and more to come with the announcement of fab 42 and a new development fab in oregon. Someone has to work in these fabs as well as support the infrastructure.
apple has opened a number of stores, created high demand products and have created jobs at many retail outlets and supporting infrastructe.
Why should we care about what other countries tax corporations.
Bring the money back here and invest here.
This post is about Apple having a lot of money and spending it conservatively, not, "how I would restructure the U.S. tax code if I were King".
I like that Apple purchases small innovative companies, if only to keep them running for potential use in the future. ...but with the skyrocketing rise of patent-squatters and IP litigation running US technology companies aground, I think their major purchases are going to have to come in the form of acquiring protection related to products they already sell. ...which are only going to get more expensive moving forward.
...though I would like to see them invest in acquiring or writing two programs for mac: a pro billing solution, since quickbooks pro abandoned mac, and a modern professional product design package. ...Draftsight and Autocad have legacy drafting covered, but there's nothing for parametric solid modeling on the mac, and it could be done very simply and efficiently with a fresh start.
I like that Apple purchases small innovative companies, if only to keep them running for potential use in the future. ...but with the skyrocketing rise of patent-squatters and IP litigation running US technology companies aground, I think their major purchases are going to have to come in the form of acquiring protection related to products they already sell. ...which are only going to get more expensive moving forward.
...though I would like to see them invest in acquiring or writing two programs for mac: a pro billing solution, since quickbooks pro abandoned mac, and a modern professional product design package. ...Draftsight and Autocad have legacy drafting covered, but there's nothing for parametric solid modeling on the mac, and it could be done very simply and efficiently with a fresh start.
You just used the daily mail to back up your claim.
Personally I'm glad that Apple doesn't move its money back to the States. As someone who isn't from there, I don't fancy having to pay between 35-40% more for my Apple products. Which is what would happen if they had to pay this money.
Folks, Pay Attention. Tax Holidays hurt Americans!!!
Please think about what you are saying.
A Second Repatriation Holiday Would Be An Even Larger Policy Mistake
Currently, firms that shift income to foreign tax havens generally understand that, while they will be able to defer tax as long as they leave their profits abroad, they will generally have to pay U.S. corporate income taxes when the profits are repatriated. This knowledge acts as a restraint (albeit a weak one) on decisions to shift investments overseas primarily for tax reasons. If Congress enacts another tax holiday, however, rational corporate executives will almost certainly conclude that more tax holidays are likely in the future and will adjust investment and tax decisions accordingly. Corporations will move more investment and jobs overseas and book more profits overseas, and then keep the profits there while they wait for another tax holiday in which the vast bulk of these profits will be exempt from tax.
In other words, the expectation of future tax holidays will make firms more inclined to shift income into tax havens and less likely to reinvest earnings in the United States — precisely the opposite of what the measure is promoted by lobbyists as accomplishing. Temporary holidays on repatriated earnings create an incentive for firms to increase the very sort of tax avoidance schemes that have helped produce the current large accumulation of undistributed foreign earnings. As tax experts Lee Sheppard and Martin Sullivan have observed, “repatriation tax holidays have the effect of encouraging the very behaviors they were intended to reverse.”[
Please think about what you are saying.
A Second Repatriation Holiday Would Be An Even Larger Policy Mistake
Currently, firms that shift income to foreign tax havens generally understand that, while they will be able to defer tax as long as they leave their profits abroad, they will generally have to pay U.S. corporate income taxes when the profits are repatriated. This knowledge acts as a restraint (albeit a weak one) on decisions to shift investments overseas primarily for tax reasons. If Congress enacts another tax holiday, however, rational corporate executives will almost certainly conclude that more tax holidays are likely in the future and will adjust investment and tax decisions accordingly. Corporations will move more investment and jobs overseas and book more profits overseas, and then keep the profits there while they wait for another tax holiday in which the vast bulk of these profits will be exempt from tax.
In other words, the expectation of future tax holidays will make firms more inclined to shift income into tax havens and less likely to reinvest earnings in the United States — precisely the opposite of what the measure is promoted by lobbyists as accomplishing. Temporary holidays on repatriated earnings create an incentive for firms to increase the very sort of tax avoidance schemes that have helped produce the current large accumulation of undistributed foreign earnings. As tax experts Lee Sheppard and Martin Sullivan have observed, “repatriation tax holidays have the effect of encouraging the very behaviors they were intended to reverse.”[
As much as I like my apple products being cheap (or cheaper than what they could otherwise be), I'd rather paying a higher price knowing that the money was going back to helping Americans in some shape or form be it in a tax that provides people food stamps or directly into the hands of assemblers.
Exactly. 35% corporate tax rate is the highest in the world. Lower that and see jobs coming back (jobs as in work not jobs as in Steve)